Arbitrary Powers to taxmen

Context

With arbitrary and coercive powers given to Taxmen, how they should use their new power?

Discussion

The recent Budget has given a number of strong measures to increase the component of tax revenues. To achieve this, the government has given sweeping powers for taxmen such as empowering taxmen to conduct searches, attach properties, request for documents, and determine fair market value of assets among others. These actions could coerce people to make declarations before taking legal recourse. But, these coercive and arbitrary powers are said to go against the tenet of a non-adversarial tax regime. This may lead to uncertainty for individuals and businesses. Most interestingly, taxmen need not be obliged to disclose the reasons for a search to an appellate tribunal. These arbitrary powers may not be correct tools of law enforcement.

The government should put in place proper safeguards to ensure that the arbitrary powers of the taxmen are not misused. As recommended in the Parthasarathi Shome committee, intensive training has to be given to the tax officers. The government should make sure that the tax officers use their new powers with oversight and as per the due process. Their arbitrary actions must be made amenable to redress.

The government can also make use of intelligent data mining to create tax demands. For this purpose, it can hire big data analytics or use their techniques to mine data.